(GENEVA) - Latin American countries are confident they will soon reach a deal in a long-running WTO dispute with the European Union over bananas after concessions by Brussels, a diplomat said Thursday.

"We are positive we can agree on something. We are very close but not yet there," said the Latin American diplomat who requested anonymity.

The European Commission said Wednesday it was prepared to accept a settlement proposed by WTO chief Pascal Lamy that calls for Europe to gradually reduce its import tariff to 116 euros (185 dollars) per tonne by 2015 from 176 euros currently.

Latin American banana producers have successfully challenged the EU's banana import regime before the World Trade Organisation on the grounds that it discriminates against them in favour of poor African, Caribbean and Pacific countries.

Under Lamy's proposals, Latin American countries would agree to a "peace clause," in effect promising not to reopen the case in return for the lower tariff.

"We will be working hard during the week end and try our best to reach an agreement before the ministerial meeting starts on Monday, or during the early days of next week," the diplomat told AFP.

Ministers from around 30 countries will mount a critical bid next week in Geneva to salvage floundering trade liberalisation talks under intense pressure to get a deal before the arrival of a new US president early next year.

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